Safaricom’s waiver on M-PESA charges for transactions under KES 1000 has expired, turning all eyes on the Central Bank of Kenya that initiated this deal. This comes about 3 months after the CBK gave an order to push all banks and telco firms to adjust prices amid the economic slowdown.
The 90-day agreement with the government was reported to lapse last week which, for now, will have M-PESA users get back to things as they were initially. However, Safaricom has said that it is awaiting further directive from CBK on the free services, which has seen the company lose an average of KES 1.7 billion monthly since mid-March.
“We are still waiting for a response from the Central Bank, we do not know if they intend to extend,” Safaricom said.
The waiver was not only meant to cushion Kenyans against the tough financial times but also cut down the use of physical cash and curb the spread of coronavirus.
But while Safaricom continues insists on awaiting the government’s directive, lender firms through the Kenya Bankers Association have noted that they will individually decide on the next step.
“Different stakeholders had different timelines. For IPSL (Integrated Payment Service Limited or PesaLink) it takes effect up to June 30, then we shall have discussions on how to proceed whether it remains the same or we make adjustments,” KBA chief executive Habil Olaka said in an interview with Business Daily. “You know it was more of a moral appeal to institutions to support the government initiative to accommodate those affected.”
CBK has not yet stated anything about the lapse although we should get something during the course of the week. The COVID-19 pandemic still continues to rain havoc across the country rapidly and the economic situation has not proven to get better.
Despite the year-on-year decline in the mobile money industry in Q1 2020, the waiver has proven to give a boost over the last few months. According to CBK, daily transactions through M-PESA averaged KES 11.94 billion in the first quarter of 2020 compared with KES 11.83 billion the year before. But we cannot ignore the huge losses that the industry has had to face. So, it would be interesting to see what the government alongside the various firms choose to do now.